United States: What Is A Trademark?

Last Updated: May 10 2019
Article by William M. Borchard

A trademark is a brand name, logo or package design, or a combination of them, used by a manufacturer or merchant to identify its goods or services and to distinguish them from others. Trademarks include brand names identifying goods (Dole for canned pineapple) and trade dress consisting of the graphics, color or shape of packaging or, after sufficient use, of goods (Coca-Cola Bottle for a soft drink); service marks identifying services (McDonald's for a restaurant service); certification marks identifying goods or services meeting specified qualifications (Woolmark for apparel made of 100% wool); and collective marks identifying goods, services or members of a collective organization (The International Game Fish Association for a game fishing organization). The same legal principles generally apply to all of these terms, often simply called "marks."

How to obtain trademark rights.

You need not register a trademark to have protectible exclusive rights in it and reserving a corporate name in one or more states is irrelevant to trademark rights. Simply by using a mark on or in connection with goods, or by displaying the mark in the sale or advertising of services, you can automatically acquire trademark rights in the geographic areas of use and natural expansion.

You can stake out nationwide trademark rights by applying to register the mark in the U.S. Patent and Trademark Office. (One reason why people confuse trademarks with patents seems to be that both are handled by the same office, but the trademark and patent operations are completely separate.)

Federal trademark registration.

Registration of a mark is not mandatory, and rights will be protected without registration if you have actually used the mark. But it may be advisable to establish your rights by applying to register the mark in the U.S. Patent and Trademark Office even before use. You can base an application on one or more of the following:

  • actual use of the mark in commerce;
  • a bona fide intention to use the mark in federally regulated commerce (but the mark subsequently must be used in the ordinary course of trade, and not merely to reserve a right in the mark, before the registration will be issued);
  • a non-U.S. owner's country of origin application filed during the previous 6 months, or its country of origin registration, in either case with a statement of a bona fide intention to use the mark in U.S. commerce (although use before registration is not required);
  • an extension to the U.S. of an international registration issued by the World Intellectual Property Organization in Geneva, based on a country of origin application or registration, with a declaration of a bona fide intention to use the mark in U.S. commerce (which extension is examined as a U.S. application, although use before registration is not required).

Trademark applications are subject to an examination process, and registration will be refused if the mark, among other things:

  • is not capable of distinguishing the applicant's goods or services from those of others;
  • may falsely suggest a connection with a person or institution;
  • consists of a flag or coat of arms of the United States or other governmental entity;
  • consists of the name, portrait or signature of a living individual without that person's consent;
  • so resembles another registered trademark, or a mark or trade name previously used by another and not abandoned, as to be likely to cause confusion, mistake or deception when applied to the applicant's goods or services;
  • is merely descriptive or deceptively misdescriptive of applicant's goods or services and has not become recognized as an indication of source;
  • is deceptive or geographically deceptively misdescriptive of applicant's goods or services; or
  • comprises matter that, as a whole, is functional.

You also must file a specimen showing the mark as actually used in commerce, such as on labels or packaging or point of sale materials (including a website that accepts orders) for goods, or online or print advertisements for services, either at the time you file the application, or at least before registration, if the application is not based solely on a foreign application or registration.

Anyone with a commercial interest can oppose a trademark application in the Trademark Trial Appeal Board (TTAB), or in a court action on the ground that registration should not be granted for one of the reasons stated above, or that the mark is likely to cause confusion with a previously used mark, or is likely to dilute the distinctiveness of a famous mark.

State trademark registration.

Although a federal trademark registration provides nationwide protection, a state trademark registration also can be useful (for any or all of the following reasons):

  • it is available to purely local businesses that cannot qualify for a federal registration;
  • it is issued almost automatically, quickly and inexpensively;
  • it will be listed in search reports obtained by others; and
  • it can be more persuasive to other local businesses and to state court judges than a federal registration.

Federal registration rights generally take precedence over state registration rights and normally can provide superior procedural advantages, however.

Advantages of federal trademark registration.

When issued, which normally takes over one year, a federal registration on the Principal Register has substantial advantages:

  • it confers nationwide priority rights effective from the U.S. application's filing date (or the foreign application's filing date for U.S. registrations based on a foreign country of origin application filed during the previous 6 months);
  • it will be listed on search reports obtained by others;
  • it is evidence, albeit rebuttable, of the registrant's exclusive ownership rights, shifting the burden of proof to anyone challenging those rights, and after 5 years the grounds for attacking the registration are limited;
  • it is required for increased remedies against counterfeiters;
  • it gives federal courts jurisdiction to hear infringement claims, counterfeiting claims, and related claims of unfair competition under state law;
  • it precludes states from requiring modifications in the display of registered marks and from applying their own dilution laws;
  • it precludes claims against the owner under federal and state dilution laws;
  • you can use it as a basis for registration in some foreign countries;
  • you can record it with U.S. Customs and Border Protection to prevent importation of foreign goods by third party infringers or even by foreign licensees not under common corporate ownership with you; and
  • you can register it with the Trademark Clearinghouse to get advantages regarding expanded top level domains.

A term that is being used and is capable of indicating source but is not yet there (like a merely descriptive term or a geographically descriptive term or a surname) can be registered on the Supplemental Register. Among its advantages, it is not subject to opposition, will prevent anyone else from registering the mark on the Principal Register, and will be listed on search reports obtained by others. But this registration does not carry a presumption of validity, ownership, or exclusive rights and cannot be recorded with U.S. Customs and Border Protection or the Trademark Clearinghouse. After the mark has acquired distinctiveness through use and advertising, you can file a new application to register it on the Principal Register.

Notice of trademark registration.

It is inappropriate to use a trademark registration notice before you actually have registered the mark, and such inappropriate use also may prevent you from obtaining relief against an infringer. You can use the informal symbol TM (for trademark) or SM (for service mark) with an unregistered mark to indicate that you claim common law trademark rights.

After federal registration on either the Principal Register or the Supplemental Register, you can use a statutory trademark registration notice in one of the following forms: the symbol ®, the phrase "Registered U.S. Patent and Trademark Office," or the abbreviation "Reg. U.S. Pat. & Tm. Off." This notice is not mandatory, but you must use it to get damages from an infringer under some circumstances.

How long trademark rights last.

Trademark rights continue indefinitely as long as you neither abandon the mark nor permit it to lose its trademark significance by becoming a generic term. On the other hand, you must maintain a federal trademark registration by filing a declaration, during the year before the sixth and each tenth anniversary after issuance (plus a six-month grace period for an extra fee), that the mark is in bona fide use in commerce in the ordinary course of trade and not merely to reserve a right in the mark. You must also renew the registration every 10 years. The federal law provides that non-use of a mark for 3 consecutive years is ordinarily considered proof of an intention to abandon it, opening the way for someone else to claim exclusive rights in the mark.

Who owns a trademark.

In the U.S., unlike many other countries, if you are the first user of a mark, you normally are considered its owner even if someone else has been the first to apply to register the same mark (unless the application was based on a bona fide intention to use the mark and was filed before your use, or the application has the priority of a foreign country of origin application filed during the previous 6 months and before your use).

As the owner of a trademark, you may license another to use it but you must control the nature and quality of the licensee's goods or services under the mark. Similarly, you may assign the mark to another party, but the assignment must include the good will of the business symbolized by the mark as well as any existing registrations or pending applications, except that you can assign pending intent-to-use applications only to a successor to an ongoing and existing business.

What infringes a trademark.

Federal and state trademark law protects a mark whether or not it is registered. It is an infringement for someone else to use the same or a confusingly similar term or design, on the same or closely related goods or services, in the same geographical area or an area of natural expansion.

Unfair competition.

Trademark infringement is one form of unfair competition. The federal trademark law protects against a likelihood of confusion, mistake or deception about the source, affiliation, sponsorship or approval of goods or services or commercial activities of another. It also protects against the use of any false or misleading statement of fact in commercial advertising or promotion which contains a misrepresentation about that person's or another's goods, services or commercial activities.

Dilution.

The federal law, and many states, also protect the owner of a famous and distinctive mark against a likelihood of dilution by the blurring of its distinctiveness or the tarnishment of its reputation even if there is no likelihood of confusion, actual competition or actual economic injury.

Trademark searches.

If you wish to adopt a new trademark, you should first do a knockout search of the Internet and the U.S. Patent and Trademark Office records to learn whether someone else may already have rights. For important marks, your attorney can order a more comprehensive search from a reputable searching company, and can interpret the report for you.

Remedies for trademark infringement and dilution.

Some states have criminal penalties for certain forms of trademark infringement. Civil remedies are also available under the federal law and most state laws:

  • an injunction against future infringement (which is the only remedy against printers, publishers of periodicals, and television and radio broadcasters who print or transmit infringing advertisements but prove they are innocent infringers);
  • the infringer's profits;
  • damages for past infringement suffered by the owner of the mark during a period determined by state law (which may be trebled under the federal law);
  • destruction of all materials bearing the infringing mark and sometimes the recall of infringing goods from the market; and
  • the costs of the action, and in exceptional cases, reasonable attorney's fees.

You cannot recover profits or damages under the federal law unless either the infringer had actual notice of the registration or you used a trademark registration notice.

Dilution remedies are an injunction and, for willful activities, the other remedies mentioned above.

Remedies for trademark cybersquatting.

The federal law provides civil remedies against a person who has a bad faith intent to profit by registering, trafficking in or using a domain name that is identical or confusingly similar to a distinctive mark or living person's name or is dilutive of a famous mark. In addition to the usual remedies for infringement, there are special remedies:

  • cancellation or transfer of the domain name to the plaintiff; and
  • instead of actual damages and profits, at the election of the plaintiff, statutory damages from $1,000 to $100,000 per domain name.

Remedies for trademark counterfeiting.

There are criminal penalties and stiffer civil remedies under federal law (and some state laws) for intentionally dealing in goods or services knowingly using a counterfeit mark or an Olympic designation.

The federal criminal penalties, which also apply to intentionally trafficking in labels or other packaging or documentation knowing that a counterfeit mark has been applied without authorization, are:

  • a fine for individuals of not more than $2 million (or $5 million for a second or subsequent offense), or imprisonment not exceeding 10 years (or 20 years for a second or subsequent offense), or both; and a fine for corporations or partnerships of not more than $5 million (or $15 million for a second or subsequent offense). The maximum prison term is longer for knowingly or recklessly causing or attempting to cause bodily injury (up to 20 years in prison) or death (up to life in prison);
  • seizure of the enterprise's vehicles, equipment and storage facilities; and
  • destruction of articles bearing the infringing marks.

The federal civil remedies are:

  • seizure, without notice, of the goods, counterfeit marks, means of making the marks, and relevant business records;
  • mandatory treble damages, possible prejudgment interest and attorney's fees (including investigator's fees); and
  • instead of actual damages and profits, at the trademark owner's election, statutory damages of $1,000 to $200,000 for each type of goods or services for which each counterfeit mark is used (subject to increase to $2 million for willfulness).

International trademark protection.

There are three ways that a U.S. business or citizen can register a trademark outside the U.S., but it takes careful analysis to design an international protection program since each approach has advantages and disadvantages:

  • under national laws, apply for a registration in individual countries (or for a Benelux registration covering Belgium, Netherlands and Luxembourg; or for an OAPI registration covering 17 African countries).
  • under the European Union Trade Mark central registration system, apply in Alicante, Spain for a single registration covering all current member countries of the European Union (28 countries still including the UK).
  • under the Madrid Protocol central filing system, apply in the U.S. Patent and Trademark Office, based on a U.S. application or registration on the Principal Register, for an international registration issued by the World Intellectual Property Organization in Geneva, Switzerland. The international registration can be extended as a local application filed in each country you designate among about 100 Protocol jurisdictions.

No matter which of these filing methods you use, you normally can claim the priority of the filing date of the first application you filed during the previous six months in a country that is a signatory to the Paris Convention, such as the U.S., in which you have a real and effective industrial or commercial establishment or of which you are a national or domiciliary.

Almost all trademark registrations can be attacked for invalidity if you do not use the registered mark in the country or region covered by the registration within three to five years after issuance.

Trademark licensing is an important aspect of international trade. Some countries require you to record licenses or to register permitted users, and failure to do so can invalidate the trademark. Recording registered trademarks with U.S. Customs and Border Protection can help you to keep infringing goods from being imported, transshipped or exported.

Industrial design protection.

You can protect a two or three-dimensional design, even if it constitutes the appearance of a useful article, under the industrial design laws of many non-U.S. countries if the design has novelty and distinctiveness. You can file a single design application covering one or more of the 70 member countries of the Hague Agreement Concerning the International Registration of Industrial Designs. The European Union has a dual system which protects an unregistered design for 3 years after initial public disclosure, and protects a registered design for 5 years, renewable for up to 25 years, after initial public disclosure if the application was filed within 12 months after initial public disclosure. You can get a design registration much faster than a trademark registration covering the same design, although the term of a design registration is limited.

Domain name protection.

A domain name is a word followed by a suffix such as .com, .org, .net, .info, .biz, or a number of other similar elements, or a country code. It is a computer address that you can use either as a world wide website locator (www.cll.com) or as an email address (law@cll.com), or both. You register a domain name in one of the registries that is part of the Internet system. And if you use all or part of a domain name prominently as a source identification on a web page or in advertising, you also can register and protect that identification as a trademark.

If a cybersquatter, in bad faith, registers a domain name that includes your registered trademark, you may be able to get that domain name transferred to you. You can start either a quick and inexpensive international arbitration (called a UDRP proceeding) or a federal lawsuit under a section of the U.S. trademark law (called an ACPA proceeding) which, although slower and more expensive, also can result in statutory damages of between $1,000 and $100,000. Additional proceedings may be possible regarding the expanded top level domains.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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